Another UIGEA Casualty: Canadian Man Charged with Fraud by the United States
August 7, 2009 (CAP Newswire) — Yesterday, a federal grand jury in the United States indicted a Canadian man on fraud charges, claiming that he assisted Internet gambling sites from off-shore in claiming hundreds of millions of dollars in U.S. payments.
Douglas Rennick, the 34-year-old Canadian in question, has been charged of laundering as much as $565 million in gambling payments, which is in violation of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. That sum was reached in just two years of activity, according to Wired.com.
Rennick falsely represented himself to financial institutions such as Union Bank and Washington Mutual to process the payments, the charges claim, doing so to avoid UIGEA prosecution. If he’s found guilty, he could get 30 years in prison, although that’s the maximum and it’s unlikely he would be sentenced so strictly.
Nonetheless, this is yet another sign that the United States UIGEA law is unworkable. Given the huge amount of money that Rennick earned, it’s inevitable that people will continue to work in the online gambling industry, and if that continues to be illegal, there will be more fraud activity. Lawmakers would be wise to legalize, regulate (and yes, tax) this activity rather than forbid it. And given yesterday’s new Senate bill by New Jersey Senator Menendez, it looks like they’re finally starting to realize that.
The Wired.com article includes an interesting analysis of the UIGEA and the state of online gambling in the United States. Check it out here. The Wall Street Journal’s version of the story can be found here.